Warnings that the coalition’s cuts will hit poorer councils hardest appeared to be coming true today after one authority revealed it would have to slash a third of its budget.
Town halls across the country had been braced for a 25% cut after chancellor George Osborne unveiled the details of the local authority settlement. But over the past week chief executives in more deprived areas have been going over the figures and are now expecting even more severe cuts.
“Poorer councils tend to be more reliant on central government grant as a higher proportion of their income – others may have more outside income from fees, charges, assets and reserves,” said Anna Turley, deputy director of the New Local Government Network. “Local government grant is distributed, in part, on a needs basis and targeted towards problems associated with high deprivation, so those areas will suffer disproportionately.”
Blackburn with Darwen council in Lancashire announced that it had to find cuts of 36% rather than 25% and, although local authorities have been urged to spread the pain over four years, Blackburn says over half of its total £48m savings target will have to be delivered next year, in 2011-12.
Blackburn Town Hall
“The £12m additional cut is to grants we receive because we are one of the most deprived areas of the country,” said Blackburn with Darwen’s chief executive Graham Burgess.
Blackburn coat of arms
“This will hit local communities across the borough hard and we need to prepare for difficult decisions to come. Whilst we are looking at a number of opportunities for staff such as voluntary redundancies and early retirements as well as deleting vacant posts it is unlikely we are going to be able to avoid compulsory redundancies given these are very difficult times we face.”
Ministers had warned against this “front-loading” of cuts. At the weekend deputy prime minister Nick Clegg said: “Local authorities … shouldn’t immediately start issuing redundancy notices for savings that they can phase in over four years and where, through voluntary redundancies, natural wastage and so on, maybe the pressure isn’t quite as great as they initially think it to be.”
But analysts say that Blackburn, in common with other councils in more deprived areas, have little choice because they have been highly reliant on areas based grants – packets of money issued by central government departments which recognise and are meant to address specific deprivation needs, from family breakdown to crime. Under Osborne’s plans these grants will be scrapped on 1 April.
Turley said: “This removing… [of] ring-fencing of specific grants could also hit poorer areas harder, as many specific grants are targeted at issues linked to disadvantage.”
Although Blackburn with Darwen council is one of the first to put a figure on the scale of the cuts, many other authorities say they are in a similar position and will soon unveil deeper cuts than they anticipated in the immediate aftermath of the spending review. One council is understood to be facing cuts 50% higher than expected last week.
Government departments have yet to announce which area-based grants they will scrap or trim, but councils with high levels of deprivation are expected to be the worst affected.
Town halls’ final budgets will not be finalised until the local government financial settlement expected on 2 December but council chief executive leaders who met last night to discuss the cuts are understood to be alarmed and frustrated at the speed with which councils are being forced to wield the axe.